Malcolm Gladwell – author famed for The Tipping Point, Blink, The Outliers and more recently What the Dog Saw – visited the Lowry in Manchester last night to give an insightful talk on his latest thinking.

I must confess to being a little nervous about giving my views after he kicked off last night’s talk by reading aloud a stinging blog review regarding his Oxford talk the night before – Gladwell discouraged the packed Manchester auditorium from following suit by joking that “the bar had been set high”! I am pleased to say that I disagree with the Oxford critic and thought that the talk was a masterpiece of story-telling, managing to string together a series of insightful connections and conclusions.

Gladwell focused on the power and importance of serendipity to the growth of individuals and wider society – history shows how society depends upon those who are brave enough to assume responsibility and uncertainty and search for solutions to unknowns. From explorers to philosphers to scientists to entrepreneurs to teachers the list goes on. I will not give away too much detail on the content of the talk (which primarily revolves around one key moving story) suffice to say that those who commit to stepping into the unknown open up possibilities for great personal growth and success (for themselves and wider society) but also disappointment – often in equal measure.

Aside from the importance of the message that Gladwell was seeking to communicate, I was equally entranced by Gladwell’s presentational delivery style. Here were my take-aways:

Open with some humour to break the ice

Say what you’re going to say and then remind the audience throughout the talk to keep everyone on track – the old mantra of Tell them about what you’re going to tell them; Tell them and then Tell them what you just told them rang true here.

“shortages so acute that virtually every industry in the world anticipates sweeping and systemic transformation over the next decade in their strategic planning, production practices and business models”

I repeat: “over the next decade“….? Are business leaders prepared for this? I must confess that this is not a business issue that has been high on the agenda with my clients but might this be about to change?

The survey, which covered some 80 countries and 1,200 influential leaders, said that water scarcity will deeply influence virtually every major company that wants to stay in business in the 21st century.

Respondents called for a focus on water conservation rather than increasing water supply.

This will impact on the way all businesses operate: from the way they function, to the products and services that they produce, as levels of water conservation continue to be squeezed.

This also opens a significant opportunity for innovation by entrepreneurs to either remodel a production process to use less water or to create products that use less water in the hands of the end user. Think of white goods manufacturers; easy-clean fabric and textiles; washing powders; sewerage systems; farming irrigation methods etc…. all ripe for reinvention.

Future investment in production plants will also likely be governed by the availability and access to water e.g. the report suggests that executives considering a new plant in China will be mindful of rapidly melting Himalayan glaciers in the Tibetan Plateau that feed some of China’s key rivers and that US factories may need to be relocated from drier South West areas to the more water-rich Great Lakes region.

So in addition to businesses managing their carbon-footprint it looks like a company’s water-footprint will become increasingly important – to understand the life-cycle of water within the business and to maximise conservation and management. Coca-Cola has been ahead of the game in this area and it is likely that the rest will have to follow.

“When it rains, it pours”…..so the saying goes, but this might turn out to be a distant wish unless we start responding to these challenges now.

What problem or need will your product or service fulfill and how is this better than what’s currently on offer?

How big is the potential market? What’s the potential “open goal”?

Do you have the right team? Is it well balanced with a decent mix of experience and raw enthusiasm?

How will you dominate your market? e.g. by having proprietary protected know-how that creates a barrier to entry for competitors or can you (quietly) build dominance in a small niche market then blast off from there?

Number of employees is irrelevant – you can run a successful business with 1 employee.

Build a business that is scalable – if you land a further £100,000 of orders, you don’t want to have to ramp up your employees and capital assets to match.

Hard to fault these words of wisdom – I would only substitute ‘cash’ for David’s repeated reference ‘profits’ as being key plus keeping the ‘WHY’ you are in business at the forefront at all times i.e. how will your business change the world?

Whilst we watch the newspaper industry being decimated, its tempting to attribute its demise to the recession and consequent decline in advertising revenue.

But such a widely held view misses the KEY point.

Look at the above chart, comparing ad revenue of US classified ads website Craigslist with ad revenue generated by traditional newspapers over the same period. Advertising revenue for newspapers has decreased (no shocks there) but look at the ad revenue for Craigslist since the recession hit in late 2007 – it has increased dramatically, demonstrating that capital does not disappear, it simply shifts to a more effective and efficient business model. It is estimated that the newspaper industry has suffered a $10bn hole in ad revenue in the last decade – Craigslist has clearly picked up much of this slack.

As well as being a game-changer for the newspaper industry, Craigslist is one of the Top 30 most visited websites in the world yet it has less than 30 employees.

Craigslist is an example of a new breed of flexible, lean, game-changing businesses that are capable of challenging traditional, established businesses – or even entire industries. No industry sector is safe. You should be considering now what game-changing business model could redefine your industry and either prepare to compete in the very near future or (ideally) start building it.

It seems reasonable to assume that targeting your business at the middle is a safe bet. After all, the middle comprises the majority of customers. Right?

Perhaps – but there is a nasty sting in the tail for the unwary…

The middle is big. Very BIG. The middle provides the most choice for customers. The middle is the most competitive. The middle is the noisiest. The middle makes it harder for you to appear bespoke – you are trying to serve too many in the middle. The middle is where the high street and big internet brands hunt (and they have deeper pockets than you). The middle ignores the genius of the 80/20 rule.

Those in the middle normally struggle. The middle is tough. The middle is the hardest work. The middle needs a lot of marketing (and therefore cash). Those in the middle have to struggle in good times and bad.

Many business owners spot this and set off on the right path i.e top or bottom but a little farther down the line they can’t seem to help themselves from gravitating towards the middle. They lose their nerve. Particularly in especially good or bad economic times (like now). But why?

Despite the recent recession, many prestige businesses continue to do well. This is because the world is still full of very wealthy individuals who can ride this dip out quite comfortably – and want somewhere to shop or service their needs in the meantime. My local Selfridges in Manchester still looked pretty packed over the recent Christmas rush, particularly around the new Tiffany concession store.

Meanwhile, businesses that had raised their sights during the recent good times will be wishing they had stayed as bargain-basement £1 shops. But it may be too late. Those that held their nerve have first-mover-advantage and will deservedly reap the rewards – our local 50p shop is busier than ever (for obvious reasons) but it didn’t start being a 50p shop in the last 12 months. It stayed as a 50p shop when there was plenty of cash credit swishing around over the past 10 years. It never lost its focus. It never lost its nerve. It never became middle. It deserves to win.

Being middle is a mistake. Aim high or aim low. Either way, hold your nerve and never ever be middle.